Medicare.

Medicare is the federal health care program that covers seniors who are 65 and older, the disabled and those experiencing end-stage renal failure (permanent kidney failure that requires dialysis or a transplant).

It is administered by the Centers for Medicare & Medicaid Services (CMS), and is funded by Social Security and Medicare income taxes, participant premiums and the federal budget.

Approximately 15 percent of the US population are on Medicare. About 20 percent of those Medicare recipients are on Social Security disability (SSDI) and approximately 200,000 have coverage because of end-stage renal failure. Source: AARP

Medicare recipients may receive their insurance directly from the CMS (Original Medicare) or participate in a plan provided by a private insurer. They can also participate in Medical Savings Account Plans.

Medicare Coverage

Medicare insurance coverage is provided in “parts,” with each part providing insurance for a category of services:

Medicare Part A – Hospital Insurance

This includes coverage for stays in the hospital or a skilled nursing facility and end-of-life care in a hospice. It also covers some aspects of in-home care.

Medicare Part B – Health Insurance

This covers costs for physicians’ fees, medical services, outpatient procedures, medical supplies and preventive services.

Medicare Part C – Medicare Advantage

This is an alternative to original Medicare provided by private insurers. It combines Parts A, B and (usually) D. Some plans offer additional benefits.

Medicare Part D – Prescription Drugs

This adds prescription drug coverage to plans provided by Medicare, private insurance companies and other entities approved by Medicare, such as employers, unions and private healthcare companies.

Original Medicare and Private Health Insurance

Medicare recipients have a choice of providers, depending on whether they want to receive benefits directly from the federal government or from a Medicare Advantage plan administered by a private provider. Both have their individual rules, coverage, costs and restrictions.

Original Medicare is health insurance provided directly by the federal government. It includes coverage for Parts A and B. If you want to also receive Part D while on Original Medicare, you will need to find and participate in a Medicare private drug plan (PDP).

Participants have a wider variety of options for doctors and hospitals than in private plans, where they are limited to in-network physicians and facilities that have contracted with that insurer. However, participants in Advantage plans may receive more benefits, and sometimes at no additional cost.

So, like the name says, Medicare Advantage plans can have several advantages over Original Medicare.

For example, while Medicare Advantage providers must still cover services for Parts A and B, and Part D drug coverage is usually included. And many plans offer additional services that Medicare alone does not, such as vision and dental plans and gym memberships.

And if you have questions or need assistance, it is far more convenient and effective to contact a private insurer’s customer support than to try to get in touch with Medicare.

Medicare Advantage plan participants must still pay their premiums for Parts A (if you have a premium) and B, in addition to other required premiums for individual plans. Some private insurers offer Medicare Advantage plans with no additional premiums.

Annual Open Enrollment

For those who would like to change their Medicare plan, there is an annual open enrollment period from October to early December. If you do not want to change your plan, you will be automatically re-enrolled in that plan for the next calendar year. More details.

Resources

Information sources referenced in this article:

AARP Fact Sheet – the Medicare Beneficiary Population

The Medicare website

When Is Medicare Open Enrollment? On the Medicare Resources website